Estimating the degree of interventionist policies in the run-up to EMU

Sondermann D,Trede M,Wilfling B


Abstract
Based on a theoretical monetary exchange-rate model in continuous time, this article establishes a sequential estimation framework which is capable of indicating central bank intervention in the run-up to a currency union. Using daily pre-European Monetary Union (pre-EMU) exchange-rate data for the countries of the current Euro zone, we find mixed evidence of active pre-EMU intervention policies (so-called institutional frontloading strategies). Our estimation framework is highly relevant to economic and political agents operating in financial markets of the upcoming EMU accession countries. © 2011 Taylor & Francis.



Publication type
Article in Journal

Peer reviewed
Yes

Publication status
Published

Year
2011

Journal
Applied Economics

Volume
43

Issue
2

Start page
207

End page
218

Pages range
207-218

Language
English

ISSN
00036846

DOI

Affiliation
Westfalische Wilhelms-Universitat Munster